Shalala v. Guernsey Memorial Hospital, 514 U.S. 87, 18 (1995)

ever she disagreed with any anouncements or changes in GAAP and
wished to depart from them. Pp. 100-102.
(a) GAAP does not necessarily reflect economic reality, and its conservative orientation in guiding judgments and estimates ill serves
Medicare reimbursement and its mandate to avoid cross-subsidization.
Pp. 100-101.
(b) GAAP is not a lucid or encyclopedic set of pre-existing rules.
It encompasses the conventions, rules, and procedures that define accepted accounting practice at a particular point in time, and changes
over time. Even at any one point, GAAP consists of multiple sources,
any number of which might present conflicting treatments of a particular accounting question. Pp. 101-102.

Kent L. Jones argued the cause for petitioner. With him
on the briefs were Solicitor General Days, Assistant Attorney General Hunger, Deputy Solicitor General Kneedler,
Anthony J. Steinmeyer, and John P. Schnitker.

Scott W. Taebel argued the cause for respondent. With
him on the brief was Diane M. Signoracci.*

Justice Kennedy delivered the opinion of the Court.

In this case a health care provider challenges a Medicare
reimbursement determination by the Secretary of Health
and Human Services. What begins as a rather conventional
accounting problem raises significant questions respecting
the interpretation of the Secretary's regulations and her
authority to resolve certain reimbursement issues by adju-*Briefs of amici curiae urging affirmance were filed for the American
Hospital Association et al. by Robert A. Klein and Charles W. Bailey; for
the hospitals participating in St. John Hospital v. Shalala by William G.
Christopher, Chris Rossman, and Kenneth R. Marcus; and for the Mother
Frances Hospital et al. by Dan M. Peterson.